Winnipeg Free Press - Learning Lessons from the Phoenix Fiasco

Canadians are not yet getting straight answers from their government about the continuing fiasco of the Phoenix payroll system.

That system for issuing $22 billion a year worth of paycheques to federal civil servants, designed by the former Conservative government and launched by the current Liberal group, has been failing since it started in February 2016. The people in charge had been told it would fail and they plunged ahead anyway.

The ruling Liberals don’t want to talk about it because it is a long, sad story of their neglect and inefficiency. The opposition Conservatives don’t want to complain about it because they started it and set it up to fail. The federal auditor general has studied the case thoroughly but he is much too polite to lay blame on anyone in particular.

As a result, this machine that doesn’t work grinds on and on spitting out erroneous paycheques. This phoenix keeps flaming out, rises from its own ashes and flames out again. No one has the gumption to kill it and get the government back to paying its people correctly — as every employer in the country has to do.

Auditor General Michael Ferguson's latest report on Phoenix, issued last week, identifies a key point in the carefully engineered catastrophe. In the spring of 2012, IBM told the Public Services and Procurement Department that the new system they were asking for would cost $247 million to build and implement — way beyond the budgeted $155 million.

To keep within the budget, the department ordered shortcuts. They cut out a feature that would allow the system to calculate retroactive pay. They reduced the number of pay advisors who would take calls about pay errors and correct them. They cut back on training. They eliminated a pilot project to use the new system in one department and thereby uncover faults before launching all the other departments into the system.

These cost-saving measures ensured that the new system would not work. After the Liberals took power in October 2015, they received a consultant’s report warning that the departments were not adequately trained to use the new system. They ignored the warning and launched the new system anyway.

The auditor general concluded that the Phoenix project was an incomprehensible failure of project management and oversight. He detected a need for a cultural change in government so that executives would feel free to give their masters bad news — such as news that the project could not be completed within budget or the news that the long-promised system was not ready for launch.

One way to encourage such a change in the culture of government would be to publicly identify the people who inflicted this fiasco on the country, invite them before a parliamentary committee and ask for their explanations. They might also be re-assigned to duties related to their proven abilities.

A cultural change in a vast organization such as the government of Canada is a hard thing to bring about. Neither the ruling Liberals nor the opposition Conservatives have shown any interest in doing so — they both think they can escape blame by pointing fingers at the other side. If the governmental culture does not change, however, we’re going to see more Phoenix-like fiascos and throw our money into more doomed projects.